UPDATE 1-U.S. FCC approves Sinclair's TV deal with Allbritton

(Adds FCC officials' comments, background)

WASHINGTON, July 24 (Reuters) - The U.S. Federal
Communications Commission on Thursday approved the $985 million
deal between Sinclair Broadcast Group Inc and
Allbritton Communications Co with divestitures and other
conditions.

The FCC's Media Bureau said Sinclair will divest the TV
station in Harrisburg, Pennsylvania, and give up the licenses of
Allbritton stations in Birmingham, Alabama, and Charleston,
South Carolina, delivering programming there through so-called
multi-casting on the signal of stations Sinclair already owns.

Sinclair will also terminate a sharing arrangement in
Charleston, South Carolina, the FCC said. Also, the originally
proposed sidecar arrangements with Howard Stirk Holdings and
Deerfield will not be included in the transaction, the
regulators said.

Sinclair had proposed such concessions in March in its deal
with the Allbritton family, which publishes Politico, as the
regulators began planning a crack down on TV stations that share
advertising sales staff.

The FCC, in a 3-2 vote with a Democratic majority, banned
such joint services agreements in March, arguing it allowed
companies to effectively control more than two TV stations in a
market, which is prohibited by FCC rules.

Thursday's approval "exemplifies the careful scrutiny the
(FCC) will provide to broadcast transactions that propose new
combinations of sharing arrangements and financial entanglements
between a dominant licensee and a so-called sidecar entity," FCC
Media Bureau Chief William Lake said in a statement.

"The Media Bureau has demonstrated clearly that it will not
allow such combined arrangements to undermine the local TV
ownership rule, which is in place to ensure competition and
diverse voices on the airwaves."

Republican Commissioner Ajit Pai said on Thursday that the
three stations in Birmingham and Charleston that will have to go
dark were "victims" of the FCC's crackdown. He added that the
move might hurt, not promote diversity as the FCC hopes.

Of the Charleston WCIV TV station, Pai said: "Apparently the
Commission believes that it is better for that station to go out
of business than for Howard Stirk Holdings to own the station
and participate in a joint sales agreement with Sinclair,"
explaining that Howard Stirk is an African-American owned
broadcast company.

Sinclair has said the sales would not have a material impact
on it or on the Allbritton deal because the stations are
expected to contribute only about $21 million in pro forma
earnings before interest, taxes, depreciation and amortization
this year.

Sinclair struck a deal with Allbritton as a flurry of
activity around local TV stations intensified. Last year,
Gannett Co Inc bought Belo Corp for $1.5 billion and
Tribune Co bought Local TV Holdings for $2.7 billion.
(Reporting by Alina Selyukh; Editing by Chris Reese)